Labour unrest could accelerate S.Africa’s unemployment rate - CNBC Africa

Labour unrest could accelerate S.Africa’s unemployment rate

Southern Africa

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“We’re looking for 120,000 job losses over the next three years in mining as a whole. In 1990, mining employed 1.2 million people. Today it employs around 500,000 and of course the way mines have achieved increased production with reduced labour is through mechanisation and automation,” Sharp from Adcorp told CNBC Africa on Thursday.

“So there’s a tremendous impulse to mechanise and automate in the mines. That means mining companies will approach the stock market, issue stock to raise capital for their capital investment projects, all of which is negative, I would think, for investors.”

Between the last quarter of 2012 and the first quarter of 2013 South Africa’s unemployment rate was measured at 25.2 per cent.

The International Monetary Fund’s (IMF) growth forecast for South Africa lowered to 2 per cent from 2.8 following the rand’s weakness and unrest in the country’s gold and platinum sectors.

The unionisation rates in mining are now at 80 per cent of the workforce. As union membership becomes more saturated, it gives rise to inter-union rivalries.

“What’s happening is that unions have taken over managerial prerogatives in the mining sector. So certain aspects of mining are now run by trade unions and not by management,” added Sharp.

He added that a number of today’s mine managers are also unable to manage labour relations, for reasons that go back to labour laws agreed in 1995. Part of the reason for the labour unrest today is therefore because of a collapse of managerial capacity in the public sector.

“What is needed is to cut back on union membership in the mining sector through a pact with unions, maybe have a new institutional arrangement where unions don’t represent mines collectively but we have individual workplace unions,” said Sharp.

“There are many innovative structures from around the world that can give rise to labour peace without compromising union membership.”